As I discussed in a previous post, label group Century Media recently pulled its catalog of music out of Spotify, based on the argument that artists aren’t properly compensated from the uses.

Today Spotify released a statement to Digital Music News in response:

We are sorry that Century Media have opted not to offer its music to their fans through Spotify. Spotify has one of the biggest music libraries in the world – of over 15 million tracks – and is committed to offering our users the widest possibleselection of music across artists and genres from around the world.

Spotify was launched out of a desire to develop a better, more convenient and legal alternative to music piracy. Spotify now monetizes an audience the large majority of whom were downloading illegally (and therefore not making any money for the industry) before Spotify was available.

Spotify is now generating serious revenues for rights holders; since our launch just three years ago, we have paid over $100 million to labels and publishers, who, in turn, pass this on to the artists, composers and authors they represent. Indeed, a top Swedish music executive was recently quoted as saying that Spotify is currently the biggest single revenue source for the music industry in Scandinavia.

Spotify is now also the second single largest source of digital music revenue for labels in Europe (IFPI, April 2011). Billboard reported in April that Spotify territories saw an average digital growth rate of 43% last year. By contrast, neighbouring countries (without Spotify) saw only 9.3% digital growth.

We are very proud of the positive contribution that Spotify makes towards growth in the music industry.

As if Spotify hasn’t already had a bad enough month, label group Century Media announced yesterday that it was pulling its catalog from the service. My days of listening to metal and hardcore seem to have passed, so I doubt I’ll personally suffer from the removal of the content; however, this may be the start of a trend among indie labels, if others also feel that they aren’t being appropriately compensated for Spotify’s use of their music.

Here is the official statement:

While everyone at the label group believes in the ever-changing possibilities of new technology and new ways of bringing music to the fans, Century Media is also of the opinion that Spotify in its present shape and form isn’t the way forward. The income streams to the artists are affected massively and therefore that accelerates the downward spiral, which eventually will lead to artists not being able to record music the way it should be recorded. Ultimately, in some cases, it will completely kill a lot of smaller bands that are already struggling to make ends meet.

At the same time, Century Media also believes that Spotify is a great tool to discover new music and is in the process of reintroducing their bands to Spotify by way of putting up samplers of the artists. This way, fans can still discover the great music released by the label.

Physical sales are dropping drastically in all countries where Spotify is active. Artists are depending on their income from selling music and it is our job to support them to do so. Since the artists need to sell their music to continue their creativity, Spotify is a problem for them. This is about survival, nothing less, and it is time that fans and consumers realize that for artists it is essential to sell music to keep their heads above water.

Obviously, it is ultimately up to the music fan and consumer how they access their music, whether it is buying, streaming or stealing. There needs to be awareness, though, that how you will consume your music has direct consequences for the artists, who we are all trying to support.

The following is a statement released today by the Association of Independent Music in response to the London rioters who burned the the Sony DADC distribution warehouse in Enfield on August 8.

You may have heard that the London riots have caused the destruction of a warehouse in North London housing many of the UK’s independent labels and artists. All the stock has been destroyed by fire.

This will lead to much hardship for the artists and labels affected. What music fans can do to show their support for the indie label community, and help them survive this disaster is to buy a digital download of an album from any one of the digital retailers in the UK, as well as going to their local record store while stocks last.

This way, the labels will be able to remanufacture their CD’s and vinyl more quickly, to resupply the record shops who are also affected by the riots.

Alison Wenham, Chairman and CEO of AIM, the UK’s Trade Association for the Independent Music Industry: “This is a disaster for the music community, but with the fans’ help, labels and artists will survive. Please show your support for the music community by buying a digital album from an independent label today”.

Barely in the US for two weeks and Spotify has been hit with a patent lawsuit and some bad press about a controversial cookie.

Last week, PacketVideo sued Spotify for patent infringement, claiming that Spotify is using elements of a music delivery technology patent secured by PacketVideo in the 90′s. The patent broadly covers a “device for the distribution of music in digital form,” including wireless devices. Spotify replied witht he following: “PacketVideo is claiming that by distributing music over the internet, Spotify (and by inference any other similar digital music service) has infringed one of the patents that has previously been acquired by PacketVideo. Spotify is strongly contesting PacketVideo’s claim.” PackVideo is looking for a permanent injunction, damages, and treble damages because they argue the violation is willful. Read the filing here.

On July 29, researchers at UC Berkley published research disclosing that Spotify (and Hulu too) has been using a controversial cookie that can’t be deleted and works even if the user blocks cookies or operates the browser in stealth mode. The cookies actually respawn (I find the constant use of this word in the paper especially disturbing for some reason) once they are deleted. So basically, even if you opt out of all tracking options, you will still be tracked. After the research was published, both Hulu and Spotify allegedly removed the cookies. “We take the privacy of our users incredibly seriously and are concerned by this report,” a Spotify spokeswoman told Wired. ”As a result, we have taken immediate action in suspending our use of Kissmetrics whilst the situation is investigated.” This may not mean much for users who have already downloaded and used Spotify, as the cookies were enabled in that earlier version.

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